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Why do you need health insurance?

By Magaly Olivero, U.S. News

Posted:
09/05/2013 02:37:10 PM MDT

A draft copy of the 21-page of a Health and Human Services Department form proposed for use to apply for low-cost insurance from Medicaid or the Children's Health Insurance Program is photographed in Washington, Tuesday March 12, 2013. The governmentâ s application for health insurance, which uninsured people will use to get taxpayer subsidized coverage starting next year. Applying could get complicated, with multiple questions about income, household composition, employer coverage and even race and ethnicity. (J. David Ake/AP Photo)

With the Affordable Care Act mandating that most Americans purchase health insurance beginning in 2014, some people -- especially those who are young or healthy -- are questioning why they need coverage at all.

"Like auto insurance, health insurance is a service you pay for but hope you will never need. It's there for the unpredictable, unexpected and fundamentally uncontrollable problems that come up in people's lives," said Dr. Molly Cooke, a practicing internist who is president of the American College of Physicians and a professor of medicine at the University of California, San Francisco.

Most consumers want and value health insurance, but they can't afford the coverage or have been shut out from the marketplace because they have pre-existing medical conditions, according to research by the Kaiser Family Foundation. "That's about to change because the law includes new options to make health coverage more affordable and you can't be denied coverage because of a pre-existing condition," said Jenny Sullivan, director of Enroll America's Best Practices Institute.

Consider these factors when deciding whether to buy health insurance. Without coverage:

You may need to pay a penalty

Most Americans who can afford health insurance must have coverage by Jan. 1, 2014 or pay a tax beginning at $95 per adult or 1 percent of annual income (whichever is greater) in 2014 and increasing to $695 per adult or 2.5 percent of annual income (whichever is greater) by 2016.

You may be healthy now, but the onset of a sudden or serious illness (cancer, diabetes, appendicitis) or a traumatic event (ski accident, car crash) can leave you with staggering medical bills. The inability to pay high medical bills, one of the most common reasons people file for personal bankruptcy, can ruin your credit history and set you back for years.

You won't have access to preventive care and primary care

The law requires insurers to cover annual checkups and preventive care -- mammograms, vaccinations, colonoscopies, and prostate cancer screenings -- without a co-pay. That means you're more likely to stay healthy and catch health problems early, when they're easier and less expensive to treat. Policies also must provide a minimum standard of care known as essential health benefits in 10 categories: preventive and wellness services, ambulatory (outpatient) care services, emergency care, hospitalization, maternity and newborn care, pediatric care, mental health and substance use disorder services, prescription drugs and rehabilitative and habilitative services (specialized therapies and medical equipment to help people facing long-term disabilities).

Even healthy, young people benefit from this kind of health insurance coverage. "Contrary to popular belief, young adults have a need for preventive care, checkups and chronic disease management, whether they have asthma, diabetes or another condition," said Sarah Dash, a research professor at Georgetown University's Center on Health Insurance Reforms. "Well-woman care is critically important, too. Young women who might be thinking of starting a family down the road need to take care of themselves in their 20s."

You may have trouble getting follow-up care

Hospital emergency departments traditionally care for patients with urgent needs, such as broken bones or head injuries stemming from an accident, regardless of their ability to pay. "But your ability to get necessary follow-up care, rehab care or whatever service you need to get back as much full function as possible is going to require coverage or a fair amount of money," said Ellen Pryga, director of policy for the American Hospital Association.

You may miss out on options to offset coverage costs

For the first time in history, people with moderate and low incomes will be eligible for tax credits and subsidies to offset the cost of premiums and out-of-pocket expenses for plans sold in the state-based health insurance marketplaces (also known as "exchanges") created by the Affordable Care Act. These marketplaces will begin selling health insurance polices in October with coverage beginning Jan. 1, 2014. Visit www.healthcare.gov or call 1-800-318-2596 for information about the marketplace in your state.

You may need to wait to get coverage

Typically, consumers can only purchase health insurance during certain open enrollment seasons or within 30 days of life-altering events, such as marriage, divorce, the birth of a child or a change in job status. For example, policies in the new health insurance marketplaces will be sold from Oct. 1, 2013 to March 31, 2014.

"There's a fantasy out there that if you're in the emergency room waiting to see a doctor, you'll be able to hop on your iPad and sign up for health insurance," said Cooke. "It's not going to work that way."

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